Head-To-Head Review: American Axle & Manufacturing (NYSE:AXL) & Denso (OTCMKTS:DNZOY)

Denso (OTCMKTS:DNZOY) and American Axle & Manufacturing (NYSE:AXL) are both auto/tires/trucks companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.

Volatility & Risk

Denso has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500. Comparatively, American Axle & Manufacturing has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Denso and American Axle & Manufacturing, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Denso	1	2	0	0	1.67
American Axle & Manufacturing	0	5	3	0	2.38

American Axle & Manufacturing has a consensus target price of $7.17, suggesting a potential upside of 8.01%. Given American Axle & Manufacturing’s stronger consensus rating and higher possible upside, analysts clearly believe American Axle & Manufacturing is more favorable than Denso.

Earnings and Valuation

This table compares Denso and American Axle & Manufacturing”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Denso	$47.03 billion	0.80	$2.77 billion	$0.86	15.05
American Axle & Manufacturing	$6.12 billion	0.13	$33.80 million	$0.33	20.11

Denso has higher revenue and earnings than American Axle & Manufacturing. Denso is trading at a lower price-to-earnings ratio than American Axle & Manufacturing, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

91.4% of American Axle & Manufacturing shares are owned by institutional investors. 3.7% of American Axle & Manufacturing shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Denso and American Axle & Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Denso	4.92%	6.83%	4.34%
American Axle & Manufacturing	0.72%	7.92%	0.97%

Summary

American Axle & Manufacturing beats Denso on 8 of the 14 factors compared between the two stocks.

About Denso

DENSO Corporation engages in the manufacture and sale of automotive parts in Japan, rest of Asia, North America, Europe, and internationally. The company offers air-conditioning systems, including thermal management heat pump system, heat pump air-conditioning systems, refrigerant products, personal heating and cooling devices, air quality system, heat exchangers, bus air-conditioning systems, automotive freezers, and cooling products, as well as heating, ventilation, and air-conditioning units. It also provides gasoline, diesel, hybrid, electric vehicle, and fuel cell vehicle power-train systems; and safety and cockpit systems, such as driving environment recognition, vehicle dynamic control, collision safety, visibility support, cockpit information, and information security systems, as well as other products. In addition, the company offers automotive service parts and accessories, comprising spark plugs, oil and cabin air filters, wiper blades, air filter elements, starters, alternators, compressors, oxygen sensors, fuel pumps, air conditioner service parts, radiators, condensers, ion generators, air conditioners for busses and construction vehicles, and truck refrigeration products, as well as refrigerant recovery, recycling, and charging machines; and repair and support products and services. Further, it provides industrial solutions for factories in automotive parts production; agricultural solutions, including Profarm Controller, a climate control system for greenhouse and horticulture solutions; and household air conditioning equipment and industrial systems. The company was incorporated in 1949 and is headquartered in Kariya, Japan.

About American Axle & Manufacturing

American Axle & Manufacturing Holdings, Inc. engages in the manufacture, engineering, design, and validation of driveline systems and related components. It operates through the Driveline and Metal Forming segments. The Driveline segment consists of axles, drive shafts, power transfer units, rear drive modules, and electric and hybrid driveline products and systems for light trucks, service utility vehicles, crossover vehicles, passenger cars, and commercial vehicles. The Metal Forming segment manufactures axle shafts, ring and pinion gears, differential gears, transmission gears, and shafts and suspension components for original equipment manufacturers (OEMs), and Tier 1 automotive suppliers. The company was founded by Richard E. Dauch on March 1, 1994, and is headquartered in Detroit, MI.